The American version of why the current round of negotiations between Israel and the Palestinians failed is fundamentally different to the one presented by Israeli officials. The list of those to blame for this failure is also very different. From the US perspective, the issue of the settlements was largely to blame.

Senior American officials involved in Secretary of State John Kerry's peace push this week agreed to share with me their take on the talks' failure.

They had one condition, in line with instructions they had received - that I didn't name them. But what they told me is the closest thing to an official American version of what happened.

The American team will be disbanded in the coming days - most of it, or all of it. Kerry has yet to decide what he is going to do - whether he will wait several months and then try to renew his effort, or release the principles of an agreement formulated by the Americans.

By releasing the American principles, Kerry would force the two sides to play offense - each side in its own internal battleground - but in doing so, he also risks exposing himself to criticism over the many errors he made along the way.

Kerry has made many errors along the way (Photo: EPA)

Using advanced software, the Americans drew a border outline in the West Bank that gives Israel sovereignty over some 80 percent of the settlers that live there today. The remaining 20 percent were meant to evacuate. In Jerusalem, the proposed border is based on Bill Clinton's plan - Jewish neighborhoods to Israel, Arab neighborhoods to the Palestinians.

The Israeli government made no response to the American plan, and avoided drawing its own border outline.

The criticism against the Israeli government is presented in terms of wounds inflicted by a friend who could still be trusted: Israel is very dear to them, but the wounds are deep.

Netanyahu-Obama rift

Let's go back to the beginning. Was this round not doomed for failure from day one?

"The negotiations had to start with a decision to freeze settlement construction. We thought that we couldn't achieve that because of the current makeup of the Israeli government, so we gave up. We didn't realize Netanyahu was using the announcements of tenders for settlement construction as a way to ensure the survival of his own government. We didn't realize continuing construction allowed ministers in his government to very effectively sabotage the success of the talks.

Netanyahu was ensuring the survival of his government (Photo: Eli Mendelbaum)

"There are a lot of reasons for the peace effort's failure, but people in Israel shouldn't ignore the bitter truth - the primary sabotage came from the settlements. The Palestinians don't believe that Israel really intends to let them found a state when, at the same time, it is building settlements on the territory meant for that state. We're talking about the announcement of 14,000 housing units, no less. Only now, after talks blew up, did we learn that this is also about expropriating land on a large scale. That does not reconcile with the agreement.

"At this point, it's very hard to see how the negotiations could be renewed, let alone lead to an agreement. Towards the end, Abbas demanded a three-month freeze on settlement construction. His working assumption was that if an accord is reached, Israel could build along the new border as it pleases. But the Israelis said no."

Did President Obama's decision to distance himself from the negotiations contribute to the talks' failure?

"The president supported Kerry throughout the duration of the talks. The clearest example of that was his willingness to prepare for Jonathan Pollard's release. Such a move wouldn't have helped his popularity in the American security system.

"Moreover, when one of the president's aides accused Kerry of the talks' failure during a background briefing with the New York Times, the president made an exception and publicly supported his secretary of state.

"There are a lot of reasons for the peace effort's failure, but people in Israel shouldn't ignore the bitter truth - the primary sabotage came from the settlements. The Palestinians don't believe that Israel really intends to let them found a state when, at the same time, it is building settlements on the territory meant for that state. We're talking about the announcement of 14,000 housing units, no less. Only now, after talks blew up, did we learn that this is also about expropriating land on a large scale. That does not reconcile with the agreement.

"At this point, it's very hard to see how the negotiations could be renewed, let alone lead to an agreement. Towards the end, Abbas demanded a three-month freeze on settlement construction. His working assumption was that if an accord is reached, Israel could build along the new border as it pleases. But the Israelis said no."

Did President Obama's decision to distance himself from the negotiations contribute to the talks' failure?

"The president supported Kerry throughout the duration of the talks. The clearest example of that was his willingness to prepare for Jonathan Pollard's release. Such a move wouldn't have helped his popularity in the American security system.

"Moreover, when one of the president's aides accused Kerry of the talks' failure during a background briefing with the New York Times, the president made an exception and publicly supported his secretary of state

President Obama supported Kerry all the way (Photo: AFP)

"It is true that the president was doubtful. That was obvious from the start. He questioned the willingness of leaders on both sides to take the necessary risks. In the end, he realized he was right."

In hindsight, had the president been more involved, could an accord have been reached?

"No. Usually, the president's involvement is very important. We all remember how President Jimmy Carter mediated between Menachem Begin and Anwar Sadat in Camp David; we all remember President Clinton's crucial involvement in the talks between Benjamin Netanyahu and Yasser Arafat at the Wye River summit (in 1998). But this case is different. Kerry has invested a lot in his personal relationship with Netanyahu. They talked on the phone three times a week and sometimes three times a day. There were video conference calls and close to 70 meetings. The relationship of trust between Kerry and Netanyahu was crucial to ensure that Netanyahu tempered his positions and moved forward. The president does not have the time for such a long-term effort - and besides, there are many rifts between Obama and Netanyahu. Every negotiation is a special case. This round was a very special case."

Ya'alon's attack

The leaders on both sides are spoiled. They make decisions that mean paying a political price only when there's a knife at their throat. A superpower like the United States has convincing means of pressure, but you avoided using them.

"There was a massive effort on our part to pull the wagon out of the deep quicksand it was stuck in. But the reality here hit us hard. Neither side had a sense of urgency. Kerry was the only one who felt a sense of urgency, and that was not enough."

No sense of urgency (Photo: AFP)

Compare the current round of talks to Henry Kissinger's efforts after the 1973 Yom Kippur War, an effort that led to disengagement agreements between Israel and Syria, and Israel and Egypt. Compare it to James Baker's effort after the first Gulf War, an effort that led to the Madrid Peace Conference in 1991.

"At the end of a war there is a sense of urgency," they said. And then one of them added bitterly: "I guess we need another intifada to create the circumstances that would allow progress.

"20 years after the Oslo Accords, new game rules and facts on the ground were created that are deeply entrenched. This reality is very difficult for the Palestinians and very convenient for Israel."

What, you didn't know this in advance?

"We knew. But we willingly pushed our lack of faith aside."

Why?

"Because Kerry believed and we believed that if not now, then when? It was a desperate effort. Kerry thought of the future - he believed, and still does, that if the two sides can't reach an accord, Israel is going to be in a lot worse shape than it is today."

Were you surprised when you discovered that the Israelis don't really care what happens in the negotiations?

"Yes, we were surprised. It surprised us all along the way. When (Moshe) Ya'alon, your defense minister, said that the only thing Kerry wants is to win a Nobel Prize, the insult was great. We were doing this for you and for the Palestinians. Of course, there were also American interests at play.

"A lot of people told us - 'don't stop. Keep going.' We told them: 'It's in your hands. Take responsibility for your own fate.' But, stuck in their own ways, they preferred we do their job for them. Public apathy was one of our biggest problems.

"One of the Palestinians who participated in the talks told an Israeli participant: 'You don't see us. We're transparent, we're hollow.' He had a point. After the second intifada ended and the separation barrier was built, the Palestinians turned into ghosts in the eyes of the Israelis - they couldn't see them anymore."

It almost sounds like you wish for an intifada.

"Quite the opposite, it would be a tragedy. The Jewish people are supposed to be smart; it is true that they're also considered a stubborn nation. You're supposed to know how to read the map: In the 21st century, the world will not keep tolerating the Israeli occupation. The occupation threatens Israel's status in the world and threatens Israel as a Jewish state."

The world is being self-righteous. It closes its eyes to China's takeover of Tibet, it stutters at what Russia's doing to Ukraine.

"Israel is not China. It was founded by a UN resolution. Its prosperity depends on the way it is viewed by the international community."

Abbas' misgivings

The method you chose - talks based on personal relationships - has failed.

"In the first six months, there were bilateral talks under our auspices. The two sides met about 20 times. In one of those meetings, special US envoy to the talks Martin Indyk left the room and the two sides were left alone.

"The talks allowed us to define the gaps between the two sides. In December, we realized it was time to present our own ideas. We held separate discussions, with Israel and with the Palestinians. Most of the talks were between Kerry and Netanyahu, in an effort to convince him to change his positions and bridge the chasm.

"At this point the Palestinians were happy. They saw a rift had been created between Kerry and Netanyahu. The rift came out to the open when Bogey Ya'alon launched his personal attacks on Kerry.

"But while we were focusing on efforts to soften the Israeli side, announcements of new housing tenders in settlements limited Abbas' ability to show flexibility. He lost his trust in the talks. The worst part was when Netanyahu said Abbas had agreed to a deal of prisoners for settlement construction. It wasn't in line with the truth.

"Abbas went into these talks a skeptic. Actually, they were all skeptics, but his doubts focused on Netanyahu. The Oslo Accords were Netanyahu's creation. Abbas watched how Oslo opened the door to 400,000 Israelis to settle beyond the Green Line. He wasn't willing to bear it anymore.

Abbas went into these talks a skeptic (Photo: AP)

"And there were other things. Israel presented its security needs in the West Bank: it demanded complete control over the territories. This told the Palestinians that nothing was going to change on the security front. Israel was not willing to agree to time frames - its control of the West Bank would continue forever.

"Abbas reached the conclusion that there was nothing for him in such an agreement. He's 79 years old. He has reached the last chapter of his life. He's tired. He was willing to give the process one final chance, but found, according to him, that he has no partner on the Israeli side. His legacy won't include a peace agreement with Israel.

"In February, Abbas arrived at a Paris hotel for a meeting with Kerry. He had a lingering serious cold. 'I'm under a lot of pressure,' he complained. 'I'm sick of this.' He rejected all of Kerry's ideas. A month later, in March, he was invited to the White House. Obama presented the American-formulated principles verbally - not in writing. Abbas refused.

"The claim on your side that Abbas was avoiding making decisions is not true. He wasn't running away, he was just stuck."

Livni's bravery

Tzipi Livni claimed after the talks' collapse that Abbas wouldn't move an inch from his known positions, while Netanyahu showed flexibility.

"It's true that Netanyahu moved (away from his positions), but he wouldn't move more than an inch. We had to put a great deal of effort into this. When we tried to move Abbas, we couldn't. As we said, he was shutting down, locking into his positions. 'I made a lot of concessions,' he said. 'The Israelis didn't know how to appreciate it,' he complained."

What concessions?

"He agreed to a demilitarized state; he agreed to the border outline so 80 percent of settlers would continue living in Israeli territory; he agreed for Israel to keep security sensitive areas (mostly in the Jordan Valley - NB) for five years, and then the United States would take over. He accepted the fact that in the Israeli perception, the Palestinians would never be trustworthy.

"He also agreed that the Jewish neighborhoods in East Jerusalem would remain under Israeli sovereignty, and agreed that the return of Palestinians to Israel would depend on Israeli willingness. 'Israel won't be flooded with refugees,' he promised.

"He told us: 'Tell me if there's another Arab leader that would have agreed to what I agreed to. I won't make any more concessions until Israel agrees to the three following terms:

Outlining the borders would be the first topic under discussion. It would be agreed upon within three months.

A timeframe would be set for the evacuation of Israelis from sovereign Palestinian territories (Israel had agreed to complete the evacuation of Sinai within three years).

Israel will agree to have East Jerusalem as the capital of Palestine.

The Israelis would not agree to any of the three demands."

This is understandable, though. Any one of these demands would've caused the Netanyahu government to collapse.

"That's true, these are very painful compromises. If you're looking for failures - this was one of them: We couldn't confront the two sides with the painful solutions that were required of them. The Israelis didn't have to face the possibility of splitting Jerusalem into two capitals; they didn't have to deal with the meaning of a full withdrawal and the end of the occupation."

Abbas refused to recognize Israel as a Jewish state.

"We couldn't understand why it bothered him so much. For us, the Americans, the Jewish identity of Israel is obvious. We wanted to believe that for the Palestinians this was a tactical move - they wanted to get something (in return) and that's why they were saying 'no.'

"The more Israel hardened its demands, the more the Palestinian refusal deepened. Israel made this into a huge deal - a position that wouldn't change under any circumstances. The Palestinians came to the conclusion that Israel was pulling a nasty trick on them. They suspected there was an effort to get from them approval of the Zionist narrative."

What was Tzipi Livni's contribution to the talks? What was Yitzhak Molcho's? (Molcho, Netanyahu's lawyer and relative, was appointed Livni's babysitter)

"Tzipi Livni was a heroine. She fought with all of her might to promote the agreement. Molcho was a big problem for her. He undermined her repeatedly. Every time she tried to move forward, he stopped her."

Molcho repeatedly undermined Livni (Photo: GPO)

(In these very pages in February, the secret axis Molcho started with Bassil Akel, a former Palestinian official and a friend of Abbas, was revealed. Akel, who lives in London, met with Molcho secretly from time to time behind the backs of the other negotiating partners. At a certain point, Molcho claimed that he had reached a series of understandings with Akel. These understandings evaporated on their way to Abbas.)

Uri Ariel's provocations

The last chapter of the American initiative was borderline pathetic. Kerry realized an agreement would not be reached. He tried to at least get an agreement on both sides to continue the talks. The Palestinians demanded the prisoners Kerry promised them, including Israeli-Arab murderers. Netanyahu demanded something in return. Kerry persuaded Obama to give him Pollard.

And then came the Housing and Construction Ministry's announcement of building tenders for more than 700 housing units in Jerusalem's Gilo neighborhood.

Abbas lost interest. He turned to the reconciliation talks with Hamas and to the question of who would inherit his mantle. According to the Americans, this is the reason for his recently launched public front against Mohammed Dahlan.

The Americans understood from their Israeli counterparts that the Gilo tenders announcement was an intentional act of sabotage, one of many, by Housing Minister Uri Ariel, an extremist who opposes any agreement with the Palestinians. Ariel denied it. He claimed he didn't even know about the tenders.

From an American perspective, what will be the consequences of stopping the talks? Will the threat of a boycott against Israel increase?

"It's hard to predict. The international community, especially the European Union, avoided any action during the negotiations. Now, a race will begin to fill the void. Israel might be facing quite a problem.

"As of now, nothing is stopping the Palestinians from turning to the international community. The Palestinians are tired of the status quo. They will get their state in the end - whether through violence or by turning to international organizations.

The Palestinians reached the conclusion there was nothing for them in the talks (Photo: AFP)

"The boycott and the Palestinian application to international organizations are medium-range problems. America will help, but there's no guarantee its support will be enough.

"There's a bigger problem threatening Israel in the immediate future. This is a very concrete threat. If Israel tries to impose economic sanctions on the Palestinians, it could boomerang. The West Bank economy will collapse, and then Abbas will say 'I don't want this anymore. Take this from me.' There's great potential for deterioration here, which could end with the dismantling of the Palestinian Authority. Israeli soldiers will have to administer the lives of 2.5 million Palestinians, to their mothers' chagrin. The donating countries will stop paying up, and the bill of $3 billion a year will have to be paid by your Finance Ministry."

Abbas and Saeb Erekat chose to make comments about Holocaust Memorial Day this week. They said it was the greatest crime in history. Netanyahu didn't believe them. The right slammed Abbas with accusations that he was a terrorist and a Holocaust denier.

They asked not to give their opinion on Netanyahu's comments. "Your extreme right wing is very happy with the collapse of the peace talks. They won't accept any gesture, or any positive comment from the other side."

What will the United States do now? (Nothing -it can of course cut the $3billion it gives to Israel every year -but it never will -so is not an honest broker to these 'talks'.Ed)

"We're taking a time-out to think and reevaluate. We mean to draw our own conclusions. Kerry's willingness to return and make an effort depends on the sides' willingness to show seriousness. Abbas' conditions were rejected out of hand by Israel. Perhaps someone in Israel will reconsider their positions? Why is a three-month settlement construction freeze such a big deal? Why not draw a map? You have a great interest in an accord reached by mutual consent, rather than one reached as a result of external pressures. Drawing a map should've been stage one."

Will Kerry present the principles you formulated; the map, the security arrangements, the agreement's components?

"It's still a possibility. The other possibility is a period of reassessment, reevaluation."

In 1975, after then-prime minister Yitzhak Rabin rejected the American demands, then-secretary of state Kissinger announced a period of reevaluation. The diplomatic and security relations between Israel and the United States were frozen. In Israel, Rabin was hailed as a hero. The right worshipped him. After several months, a ladder was found to allow Rabin to climb down from the tree.

The Obama administration is soft. It's different from the Nixon administration, as Kerry is different from Kissinger.

What kind of reevaluation will Kerry choose

"We don't know. Kerry hasn't decided yet." (Kerry doesn't have a clue -he is totally naive and flummoxed, and should re-assess his total dedication to Israel that he has so often declared! Ed)